US PET supply to tighten amid strong demand, force majeure declarations

Author: Luly Stephens

2020/09/10

HOUSTON (ICIS)--The polyethylene terephthalate (PET) is facing new challenges following damages at feedstock monoethylene glycol (MEG) plants. The damages resulted in a force majeure declaration by three MEG producers, which in turn led to a force majeure declaration by a PET producer.

Asia is being considered as a possible supplier of MEG until domestic plants resume operations. Local sources are hopeful that water and power at the affected plants in Louisiana may be restored in early October, but believe that the impact on PET availability will be significant. This has tightened supply as demand has remained robust.

Although resin imports from Latin American may offset part of the shortage, many believe that pellets prices are likely to increase.

Inquiries to Asian PET suppliers have shown an increase as prices in the region are low at $650-680/tonne FOB, but delivery would take weeks.

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PET resins can be broadly classified into bottle, fibre or film grade, named according to the downstream applications. Bottle grade resin is the most commonly traded form of PET resin and it is used in bottle and container packaging through blow moulding and thermoforming. Fibre grade resin goes into making polyester fibre, while film grade resin is used in electrical and flexible packaging applications.

PET can be compounded with glass fibre for the production of engineering plastics.

DAK Americas, Indorama, Nan Ya Plastics Corporation and Far Eastern New Century (FENC) are PET producers in the US.

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 Thumbnail image shows a bottle made of PET. Picture source: Photoalto/REX/Shutterstock